Carlos Ferreira, joint CEO of newly established Helical Capital Partners. Picture: SUPPLIED
Carlos Ferreira, joint CEO of newly established Helical Capital Partners. Picture: SUPPLIED
Joint CEO Craig Beney. Picture: SUPPLIED
Joint CEO Craig Beney. Picture: SUPPLIED

Switzerland-headquartered Partners Group, one of the world’s largest private equity firms with 7,000 private investments and R1-trillion in assets, is making its products available to South African investors for the first time through newly formed local private equity manager Helical Capital Partners.

"The African market has been on Partners Group’s radar for some time. We are approaching this with a view to establishing the Partners Group brand and products in the African market over the long term. Ultimately we believe Africa could become a very important market for the firm," a Partners Group spokesperson told Business Day via e-mail.

Helical Capital Partners — led jointly by former Convergence Partners chief operating officer Craig Beney and former Gijima chief financial officer Carlos Ferreira — is the product of a tie-up between Partners Group and Convergence Partners, a local investment firm focused on technology and telecoms.

Helical Capital Partners would initially offer a Guernsey-domiciled replica of Partners Group’s global value fund, which invested in 3,000-3,500 private companies worldwide, Ferreira said on Friday.

South African investors are considerably underexposed to companies not listed on public stock exchanges, despite private equity outperforming stock market returns.

One of these was the US Infrastructure Corporation, which used geomapping to locate underground infrastructure in order to prevent damage on behalf of utility companies in the US and Canada — a service that earned it $830m in 2017.

The JSE’s lacklustre performance in recent years has led retirement funds and asset managers to seek returns in alternative investments, such as private equity and hedge funds.

South African investors are considerably underexposed to companies not listed on public stock exchanges, despite private equity outperforming stock market returns.

A representative sample of South African private equity funds delivered higher returns over three, five and 10 years than the before-fee total return of the JSE all share index, according to the latest private equity performance report from Riscura and the Southern African Private Equity and Venture Capital Association (Savca).

Retirement funds, which by nature had a long-term investment horizon, had on average a 3% allocation to private equity, which was well below the 10% cap imposed by pension fund regulation, said Ferreira. This was concentrated mostly in SA and sub-Saharan Africa, he said.

Despite a relaxation of exchange control rules, South African investors remained inwardly focused, though the country accounted for less than 1% of global GDP, Beney said.

The formation of Helical Capital Partners boded well for Southern Africa’s private equity industry, Savca CEO Tanya van Lill said. Local private equity managers had struggled to raise funds from offshore investors. Only 3% of global foreign direct investment was directed towards Africa.

ziadyh@businesslive.co.za